Credit and Prepaid Card News
The latest news on the credit card and prepaid card industry from the Center for Responsible Lending.
- Prepaid Cards Often Used to Manage Funds
Boston Globe 08 Feb 2014
Prepaid debit cards are widely considered an alternative for consumers who do not qualify for traditional checking accounts, but the Pew Charitable Trusts has discovered that most Americans who use ...
- Why You Should Keep Your Debit Card at Home
Washington Post 07 Feb 2014
Hearings on Capitol Hill in response to recent retail data breaches shone a spotlight on the unequal treatment of debit cards compared to credit cards.
- T-Mobile Enters Prepaid Card Market
Washington Post 22 Jan 2014
T-Mobile introduced a prepaid card on Jan. 22, following other retailers like Wal-Mart, Walgreens, and Target into the banking world.
- Is 18 Too Young for Credit Cards?
MarketWatch 08 Nov 2013
A new study on the credit card behavior of young adults suggests that a provision in the Credit Card Accountability, Responsibility and Disclosure Act of 2009 -- intended to keep many people under 21 years of age from getting a credit card -- was misguided and unnecessary.
- New Tactics Keep College Kids Hooked on Plastic
CNBC News 04 Oct 2013
Since passage of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, use of credit cards among college students has declined. Debit cards, however, are becoming more common and now are used by nearly 80 percent of students, a survey by Sallie Mae and Ipsos found. Many student ID cards double as debit cards, and prepaid cards are gaining popularity among parents who want to better control their kids' spending. The problem with prepaid and debit cards is that they do not allow students to build a credit record, and they often come with fewer marketing restrictions.
- Chase Scraps Joint Credit Cards
CNN Money 24 Sep 2013
In a move likely to be copied by other banks, Chase has announced it will no longer allow customers to open joint credit cards -- a popular option for couples sharing the responsibility of repayment.
- JPMorgan Fined $389 Million for Deceptive Credit Card Practices
Washington Post 20 Sep 2013
The Office of the Comptroller of the Currency (OCC) on Thursday hit JPMorgan Chase with $389 million in penalties for duping millions of customers into buying expensive and unnecessary services when they signed up for credit cards.
- Banks Probe Regulatory Limits of Credit Card Add-Ons
American Banker 17 Sep 2013
American Express, Wells Fargo, and Citigroup all seem to be testing how far they can go with credit card add-on services, even though regulators are preparing for another round of crackdowns on these controversial products.
- Ranking the States: Credit Card Debt
Washington Post 20 Aug 2013
Data compiled by credit rating agency TransUnion shows that Alaska has the highest rate of credit card debt in the United States, owing an average of $6,910 -- nearly $2,000 more than the national average.
- Credit Card Delinquencies Reach 18-Year Low
CNN Money 02 Apr 2013
Delinquencies on credit cards issued by banks hit the lowest point in 18 years after plummeting to 2.47 percent in the fourth quarter, reports the American Bankers Association (ABA). The decline throughout 2012 sends a signal that consumers are attempting to get debt under control...
- Credit Card Users Smarten Up
U.S. News & World Report 13 Mar 2013
Americans are becoming more thrifty, according to new data from rating agency Fitch. The share of delinquent accounts is at the lowest level since 1991, with more credit card borrowers paying off their balance in full each month and fewer carrying a balance. The typical credit card charge-off rate peaked at 11.4 percent in early 2010 but began to fall abruptly by 2011. The Federal Reserve recently reported that the total number of credit card accounts fell from nearly 500 million in 2008 to 380 million now. Two area where Americans are not deleveraging are student loans and federal debt. Total student loan balances are nearly $1 trillion, with default rates exceeding any other type of debt. Americans' savings rates also continue to decline.
- Capital One to Refund $150 Million to Credit Card Customers
Los Angeles Times 18 Jul 2012
In the Consumer Financial Protection Bureau's first major enforcement action since the agency went live last July, it has ordered Capital One Bank to refund $140 million to credit card consumers for questionable marketing of add-on products. At the same time, the federal Office of the Comptroller of the Currency hit Capital One with its own $10 million consent order tied to unfair billing practices from May 2002 to June 2011, for total refunds of $150 million. Additionally, Capital One must pay $60 million combined in civil penalties for the practices. CFPB director Richard Cordray said the bank's call center operators tricked customers with low credit scores or credit limits into buying "products they didn't understand, didn't want, or in some cases, couldn't even use" -- such as payment protection and credit monitoring -- when they activated their credit cards. As part of the consent orders, Capital One has agreed to refund the full amount of add-on products, plus interest, to customers who enrolled in them or tried unsuccessfully to cancel them on or after Aug. 1, 2010. Finance charges and other associated fees will be refunded as well. "We are putting companies on notice that these deceptive practices are against the law and will not be tolerated," Cordray declared.
- Prepaid Debit Cards Scrutinized by Regulators
Raleigh News & Observer (NC) 19 May 2012
As free checking accounts become more scarce, prepaid debit cards are taking the spotlight. The reloadable cards have been one of the fastest-growing bank products for years as lower-income customers look to avoid overdraft charges and fees. According to a new survey by the National Foundation for Consumer Credit Counseling, there are currently more than 30 million Americans using such cards. Adam Rust of Reinvestment Partners said approximately $300 billion was put on the prepaid cards last year, up from $30 billion in 2006. However, many say the cards carry high fees of their own. Now, the Consumer Financial Protection Bureau (CFPB) is getting involved. The agency recently announced that it will hold a hearing about the cards in Durham, N.C. It is seeking consumer feedback. Those in attendance will include CFPB director Richard Cordray and Martin Eakes with the Center for Responsible Lending.
- Stay-at-Home Mom Fights New Credit Card Rule
CNN Money 16 May 2012
A grass-roots campaign is gaining momentum against a new provision of the 2009 CARD Act that, starting in October of last year, has made it more difficult for stay-at-home parents to qualify for their own credit cards. The Federal Reserve rule dictates that credit card issuers consider individual income, rather than household income, to determine eligibility. As a result, many parents who rely on their spouse's income feel shut out of access to credit. One Virginia mom whose application for a Target card was rejected has refused to acquiesce to the new guideline, recently launching an online petition to persuade the Consumer Financial Protection Bureau -- which assumed jurisdiction over the rule last summer -- to amend it. The petition at Change.org already has garnered in excess of 30,000 signatures. "I used to be CEO of a small software consulting business and am now staying at home to take care of a toddler and first grader," wrote one stay-at-home mother on the petition. "If you had to pay someone to do what I do now, it would cost you at least $120,000, which is a lot less than what I used to earn. ... Don't you think I should be allowed to get a credit card on my own?" Holly McCall, the 34-year-old mother of two who organized the petition, delivered the signatures to the CFPB on May 15, supported by a handful of petitioners. Some of the women dressed as 1950s housewives, to illustrate how the rule "feels like a flashback to the 1950s because of the way women aren't empowered financially."